Message from the Secretary

FY 2006 Performance and Accountability Report

Bureau of Resource Management

November 2006

Report

I am pleased to present the U.S. Department of State's Performance and Accountability Report (PAR) for Fiscal Year 2006. American taxpayers are right to expect maximum performance and maximum return on every dollar spent to support U.S. foreign policy and development programs. The PAR provides the financial and performance information Americans deserve as investors in U.S. diplomacy and overseas development.

The Department of State's mission is to create a more secure, democratic, and prosperous world for the benefit of the American people and the international community. President Bush and I have called on America's diplomats to pursue this mission with a bold approach, one that answers the President's charge to support the growth of democratic movements and institutions in every nation and culture with the ultimate goal of ending tyranny in the world. Early on in my tenure as Secretary of State, I called this approach "transformational diplomacy." I am proud to share through this report the innovative, skillful and courageous ways the men and women of the Department of State are bringing this practice to life.

Transformational diplomacy is about working with our partners around the world to build and sustain democratic, well-governed states that will respond to the needs of their people and conduct themselves responsibly in the international system. It is about using America's diplomatic power and resources to help people across the globe better their own futures, build their own nations, and thrive under an umbrella of security and peace.

As detailed in this report, the Department's work in FY 2006 involved increasingly difficult and dangerous missions, rebuilding operations in Iraq and Afghanistan, expanded reconstruction and stabilization roles, and managing a global presence of more than 260 embassies, consulates and other posts worldwide. We remain engaged in a long conflict against terrorists and violent extremists, but our diplomatic actions over the past year played a vital role in protecting the nation and our allies against this threat. We strengthened relationships with traditional allies and built new partnerships to combat threats to our common security, including the spread of weapons of mass destruction. Most importantly, we continued to work directly with citizens around the world who wish to build free societies based on democratic principles and hope.

The successes we achieved in FY 2006 are strides toward a future of expanded freedom, greater security, sustainable development, and increased diplomatic strength. To realize the President's vision of freedom across the world, the Department is transforming itself and its practices through a series of transformational diplomacy initiatives. For example, we are forward-deploying our people to the cities, countries, and regions where they are needed most. Through the first two phases of Global Diplomatic Repositioning, we have successfully redirected 200 positions to work directly on transformational priorities in strategic countries like China, India, Nigeria, and Indonesia to name a few. We are giving our diplomats more comprehensive training, including in critical language skills, to engage more effectively with local populations and better communicate America's message overseas.

With the creation of the Office of the Director of U.S. Foreign Assistance, we have fundamentally reorganized the way we plan, budget and manage foreign assistance to increase transparency, accountability, integration, and focus. Our new process establishes clear strategic direction and priorities for foreign assistance. This reform will transform our capability to use foreign assistance more efficiently and more effectively to further our foreign policy goals, bolster our national security, reduce poverty, and improve people's lives around the world. Our effort to improve how foreign assistance dollars are managed and spent reflects the Department's long-standing commitment to being effective and accountable stewards of taxpayer dollars. The high-quality performance data we share with the public and Congress through the PAR, are made possible by a dedicated team of officers working domestically and overseas to support the Department's financial operations, policy and program implementation, and performance and accountability reporting.

My leadership team and I, including Chiefs of Mission overseas, value performance planning as a key component of transformational diplomacy. Performance plans help us maximize the return on resources entrusted to us and show Americans how investing in transformational diplomacy pays dividends, at home and abroad. As our foundation, the Department and the U.S. Agency for International Development (USAID) operate under a joint Strategic Plan that captures and articulates U.S foreign policy objectives shared by both agencies. Close collaboration between State and USAID on setting a long-term strategic vision ensures that foreign policy priorities and assistance programs are fully aligned. By doing so, the Strategic Plan promotes an organizational culture within the Department of State and USAID that values effectiveness and accountability.

The Department of State and USAID work together to meet the global diplomatic and development challenges of the twenty-first century. In this spirit, this report provides a complete and reliable account of the Department's FY 2006 performance results and financial statements, as well as for the first time ever, performance information on select initiatives and programs managed by USAID. In this critical moment in history, the men and women of the Department and USAID are engaged in an extraordinary partnership to transform our world for the better through diplomacy and development. Americans have every reason to be proud, as I am, of their service to secure a future of freedom for all people.

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